Supply Chain Management Professional - June 2016 Issue

DEMAND PLANNING
Demand Planning
& Forecasting: The
three essential pillars -
Dr. Rakesh Singh
08
GURU SPEAK
Campaign Supply
Chain – How to deliv-
er-in- full-on- time -
Dr. John Gattorna
21
HUMAN RESOURCES
The business sense behind
health and safety
Darryl Judd
40
June 2016 | Volume 2- No.2 | Rs.200
SUPPLY CHAIN
P R O F E S S I O N A L
MANAGEMENT
SCMPro_Pg_1.indd 30 29/06/2016 12:21:39 PM

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Time to Define Our Business
around Technology
T h e w o r l d i s p o i s e d o n t h e t h r e s h o l d o f a n e w o r d e r – o n e d r i v e n
b y t e c h n o l o g y . A c r o s s t h e W e s t e r n w o r l d , t e c h n o l o g y i s c h an g i n g t h e
w a y i n d u s t r y o p e r a t e s . M an an d m ac h i n e ar e t o d a y ab l e t o o p e r a t e
side by side, without impacting the safety of humans. apid strides in
t e c h n o l o g y d e v e l o p m e n t h as r e d u c e d t h e p r i c e p o i n t s i n t e c h n o l o g y
– FID devices now can be discarded a er one use. Mobile devices
are ge ng smarter and better. Firms can use oogle maps to track
their shipments – like we track the Uber or Ola cab as it comes to
the pickup point. And that too free There are two distinct drivers
f o r t e c h n o l o g y – o n e i s t h e h ar d w ar e – t h e p i e c e s o f e q u i p m e n t t h a t
when embedded in all our shipments gives us instant visibility. Once
devices start talking to each other, we can move on to the current
wonder – driverless vehicles
The second driver is so ware – when billions of devices start
streaming live data, we need the ability to analyze and make sense
of this data deluge. Technology advances like Big Data and analytics
fit the bill nicely. In between these two paradigms, we have the social
media phenomenon, which has the potential to change the way we
s e n s e d e m an d o f a p r o d u c t . A l l p u t , t e c h n o l o g y i s a g am e c h an g e r .
ThelogisticsIndustry,whichhasbeenalaggardintechnologyadoption,
now, has a number of options – from shared pla orms to third party
applications on a pay per use model. The bottom line – firms have to
relook at their technology strategy. In my opinion, it time we start
defining our business around technology. ot technology around the
business. The time to digitize is now.
We bring you a collection of views on technology in supply chains in
this issue. We hope you find it interesting.
And in the next issue, catch all the action at the second Demand
Planning and Forecasting Forum and awards – the only pla orm for
demand planning and forecasting professionals in India.
Happy eading
GIRISH V S
E d i t o r
g i r i s h . v s @ s c m p . i n
editorial
The structural
imbalances that
face us cannot
be resolved
with short term
measures. Hope
the government
stays true to
the course.
Publisher
Jayaram Govindan Nair
jayaram.nair@scmp.in
Mobile:9821732929
Managing Editor
Dr. Rakesh Singh
rakesh.singh@scmp.in
Editor
Girish V S
girish.vs@scmp.in
Designer
Sidhi Jadhav
sidhi.jadhav@scmp.in
022 28746757
Advertising
Riddhi Solanki
riddhi.solanki@scmp.in
022 28747808
Administration & Subscription
Sanjay Gupta
sanjay.gupta@scmp.in
022 28742227
Editorial Advisory Board
Dr. John Gattorna
Dr. Mahender Singh
D-204, Riddhi Siddhi Complex, Off. S.V.Road,
Prem Nagar Road, Goregaon (W), Mumbai
400062. INDIA.
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SUPPLY CHAIN
MANAGEMENT
P R O F E S S I O N A L
SCMPro_Pg_3.indd 2 28/06/2016 4:13:57 PM

June2016|Volume2|No.2
SCM News
06 Comments on Global Supply Chain News
Demand Planning
08 The three essential pillars
Lead story
10 Technology Convergence to
Redefine Supply Chains
Guru Speak
21 Campaign Supply Chains How to
deliver-in-full-on-time to project sites
Spotlight:
25 Supplier Relationship Management- making
suppliers efficient
Feature
28 Warehouse Optimization – A Competitive
Edge in Supply Chain
Interface
30 Becoming the World’s Shipping Partner
Academic Advocacy:
32 Trends in SCM & Logistics: A Focus on Risk
Humanitarian Logistics:
34 Feeding the next Gen – A labor of love
Human Resources:
40 The Business Sense Behind Health and Safety
LSP Focus –
42 Re-usable Assest pooling
Event:
44 India Logistics Expo – 2016
SCPC
46 Customer Service in Modern Supply Chain
21
10
32
24
42
SCMPro_Pg_4.indd 4 29/06/2016 12:28:55 PM

SCM News
6 Supply Chain Management ProfessionalJune 2016
Rocket Scientists to Make
Money from Logistics
The wolves of Wall Street are sharpening their
claws for a new way to make money – using the
global shipping data on global commodity trade. A
bunch of billionaires will use technology to track
ships as they ply the seas, monitoring where they
dock and what they carry. Using this data, they
will trade commodity prices among other asset
classes. A new company – US based CargoMetrics
is planning to integrate this data with satellite
data on cropping patterns to estimate crop yield.
This will help them track prices and make money!
Apparently, everything is fair when it comes to
making money.
A Long Term Threat to
Make in India
For years, corporate strategy moved manufacturing to low
cost countries like China. But Industry 4.0 is changing
that trend. Adidas – the German Shoe manufacturer is
planning to shift manufacturing back to Germany – into
a highly robotized production facility. Two factors are
pushing this trend – rising wages in China and advances
in robotics. The factory is expected to make a pair of shoes
in five hours, as compared to the weeks it takes in China.
Moving production closer to markets will reduce the
response time of the supply chain to changes in customer
tastes and reduce time to market. BCG estimates that by
2025, robotics will boost productivity by 30 percent and
reduce wages by 18 percent. If this trend persists, our
dream of make in India will revert to make for India!
MIT CTL Research – Simple
but Effective
Every year, researchers from MIT-CTL engage
with industry on a series of research initiatives
to improve supply chain function. One set of
researchers have come up with a simple but
efficient solution to improve picker’s efficiency
in a warehouse, thereby reducing costs. The
researchers studied a retailer with relatively slow
moving products. The study concluded that in a
scenario where the factory considers both DC and
store inventory, by rounding off the picks to the
next higher even number, retailers would be able
toreducepicksby11to13percentandthein-store
inventory would rise by 2.8 percent. The research
concludes “It is highly applicable to retailers who
have been accustomed to picking exact pieces,
offering them the opportunity to implement a
“picking quantity multiple” that generates great
savings with little negative repercussions.”
The Not so sexy Application
of Drones
The idea of a drone delivering the product you
ordered from Amazon is a compelling one. But
it ignores the challenges of flying drones in a
crowded urban landscape – security risk and cost
of insurance (cover from plausible accidents) are
major hindrances. However, Walmart – the second
largest retailer is using drones for a very different
and not so sexy purpose – inventory management.
Walmart is testing out drones in its warehouses to
take inventory. Drones flying up and down the aisles
take up to 30 images per second. These images help
develop an accurate inventory count. It is speculated
that a drone can do what takes a month by humans
crawling up and down the aisles in a day. Mr. Shekar
Natarajan, Vice President of last mile and emerging
science, Walmart believes that drones could improve
supply chain efficiency. Walmart is looking to drones
in reducing their supply chain costs. Not so sexy
application after all- just inventory taking!
SCMPro_Pg_6.indd 6 28/06/2016 4:19:46 PM

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Demand Planning
Demand planning and forecasting
is about people, processes, and
technology. The three broader aspect
of demand planning today are finding
the right model, understanding the
performance of the forecast and
managing the demand planning
and forecasting processes. Many
developments on technology front
like emergence of data sciences and
predictive analytics are playing an
important role in shaping the practice
of forecasting today. In this article, I
intend to briefly discuss the art and
science of demand planning.
Thefirstpressingquestionishowdoes
one choose a forecasting method?
Most often firms choose a single
forecasting technique as one size
fit all solution for all products. They
are on lookout for “the forecasting
technique that will predict the future
without much error.” The most
commonly used method is time series
method. When time series method
is not able to predict a landscape
which is dynamic today, we move
to judgmental method. The most
dynamically used judgmental model
is “sales force composite”. This is
closer to the concept of predictive
analytics based on last mile demand
assessment.Theuseofcausalmethod
is very limited to a few organizations.
In a world where demand is dynamic,
using a single method of forecasting
Organizations are driven by numbers – with each division or function generating its own set of numbers. The
numbers start with the demand forecasting function. The result is confusion and chaos. Top management
spends considerable time and effort to reconcile these numbers. The need of the hour is to develop a
demand planning process which aligns consumer demand and organizational capabilities. Dr. Rakesh Singh
writes about the three basic pillars for an aligned demand planning function.
Dr.RakeshSingh,
Chairman,InstituteofSupplyChain
Management&ManagingEditorSCMPro
Demand Planning
& Forecasting:
The three essential pillars
Demand Planning
SCMPro_Pg_8_9.indd 8 28/06/2016 5:07:39 PM

Demand Planning
9Supply Chain Management Professional June 2016
can be dangerous. The uncertainty
emerging due to industry competition
and its impact on organizations to
become more agile and improve
service levels has made task of
forecasting even more difficult. There
is a need to understand segmentation
based forecasting as multiple supply
chain resides in the same business.
Practitioner needs to realize that
single forecasting method may
not work in such a fast changing
landscape. I have been oft repeating
this in my speaking assignments
at various forums. Sunil’s chopra
strategic fit analysis and framework is
needed to solve much of the problems
that confronts demand-planning
analyst today. Here data science
can provide a good clue to demand
planner about multiple supply chains
and their characteristics. Using
data science demand planners can
understand the segment, which
shows static demand and hence can
comfortably use peak to average time
series techniques like Holt and Winter
Model. Use of big data and causal
methods may help identify many
macro and micro factors important
in explaining the causal effect. Using
the coefficient of determination and
variable coefficient one can easily
predict a lot of implied uncertainty
and decide on supply chain strategy.
Yes where predictability is not
possible firms need to build their
information channel and their
responsive capabilities to react in the
shortest possible time. Most firms
have failed to incorporate this into
their supply chain.
The second issue that is important is
to measure the forecast performance.
The performance of the forecast is
important mainly because the buy
in of the forecasting process in an
organization becomes easier and
so does supply chain integration.
The goal of any forecasting system
should be to be as accurate as
possible. One measure of accuracy is
to minimize error, which includes two
components - bias and magnitude.
Demand planner should use at least
one measure for bias and another
for magnitude on an ongoing basis
to assess accuracy. Bias is defined
as a systematic difference between
forecast and actual result over a
period of time. The bias could be
measured with the help of mean error,
cumulative forecast error or mean
percent error. A large and consistent
negative or positive error signifies
a forecast that is consistently high
or low. Once the bias has been
identified, management can take
active steps to correct the forecast by
adding and subtracting the amount of
bias from the predicted forecast.
The magnitude indicates the variance
between the actual result and the
forecast. This can be measured
through Mean absolute deviation
and mean absolute percentage error.
When a magnitude reflects high
forecast inaccuracies, it cannot be
corrected as easily as the problem
arising from bias inaccuracies. The
problem may be with the forecasting
systems and processes. In this case
forecasting system needs to revised
and streamlined.
This takes us to the third pillar of a
good forecasting organization. Firms
in order to make forecasting as a
lifeline of their organization need to
build in dynamic alignment. There is a
need to align the organization to their
operating environment. Forecasting
requires a larger buying from the
organization and hence the chief
executive should lead it. The sales
and planning exercise has a meaning
if it starts by mobilizing change and
this is possible only through executive
leadership. The supply chain strategy
should be translated into operational
terms. All the functional area should
be aligned to this strategy. As we
know these areas have their own
forecast. The big question is how do
we arrive at a single forecast. The
process is to iron out various issues
facing marketing, supply chain and
finance function and arrive at a
single forecast which aligns sourcing,
production distribution, marketing
and sales. The organization should
motivate to make forecasting
strategy everyone job. There is a need
to make sales and operations strategy
a continual process.
These are the broader pillars of
a good forecasting organization.
These pillars will make forecasting
the biggest aligning tool, and supply
chain of such organizations will help
create competitive advantage for the
firms.
Most o en rms choose
a single forecasting
technique as one si e t
all solution for all
products
emand planner should
use at least one measure
for bias and another for
magnitude on an
ongoing basis to assess
accuracy
SCMPro_Pg_8_9.indd 9 28/06/2016 5:07:39 PM

Lead Story
Supply chain is a recent discipline.
Supply chain was a function
responsible for delivering a product
to the customer. Nothing beyond
that. For a very long time, Logistics
and warehousing defined supply
chain. And the operative word was
cost reduction. However, changes
in the business ecosystem is forcing
a change. Today, the business is
the supply chain. And the single
biggest factor driving this change is
technology.
The manufacturing world is on
the cusp of its biggest change so
far – Industry 4.0. Industry 4.0 is a
paradigm shift in manufacturing,
driven by technology. A convergence
of technology will redefine
manufacturing, seeking greater
efficiency and productivity. How will
this affect supply chains? Supply
chains cannot escape changes.
For one, 3D printing will render
aftermarket supply chain – one of the
most lucrative segments – irrelevant.
At the other end of the spectrum,
Rolls Royce has unveiled their vision
of global shipping – where a flotilla
of unmanned vessels ply the seas,
monitored from a central console.
Again a redefining moment for
shipping.
On the ground, Walmart is using
drones in its warehouses for inventory
taking. AGV’s are an established idea
in a number of factories. Robotics has
spreadintowarehouses,whererobots
do the running around, and humans
the pick. Even here, technology is
at play. Researchers are creating a
robotic arm which can pick up objects
– just like human hands. We will soon
see fully robotized warehouses, with
no humans on the floor.
One significant area of technology
in supply chain is in information
sharing. A host of IoT enabled devices
will continuously stream data to a
central console. The data can be used
to monitor the health of the systems,
their position, helping track and
trace.
Three dimensions will define the
supply chain of the future – supply
chains need to connect all links in
the chain – suppliers, manufacturers,
customers, and intermediaries
– in real time to exchange data
seamlessly. The second dimension
is the speed of response – the ability
to analyze vast amounts of data and
convert it into actionable information
to the managers. Along with speed,
the network should enable the supply
chain manager to make decisions
on the fly. Cloud enables firms to
collect information in real time, using
IoT, and using predictive analytics
spot disruptions and take corrective
action. Taleris, a Texas based
firm offers a service - Intelligent
Operations - on cloud platform, which
uses tools such as performance data,
prognostics recovery, and planning
optimization solutions to improve
operational efficiency of Airlines
operators.
We bring you a few perspectives on
technology in SCM.
Technology Convergence
to Redefine Supply Chains
Lead Story
SCMPro_Pg_10.indd 10 28/06/2016 4:22:48 PM

Lead Story
Opportunities open up in markets all
the time. The problem is, firms rarely
get to know about them until it is too
late. The culprit is the information
chain firms have built over the years
– it takes up to a week for information
to travel from the market to the head
office – by which time competition
is already aware and acting on the
opportunity. In a recent conversation
with the head of supply chain of a
large consumer goods frim, the topic
of how to capture transient demand
surges came up. He was frustrated
– by the time he was aware of the
opportunity, others were at the job.
The question was – is there a way to
identify demand shifts in markets,
without breaking the bank. This is
where social media comes in. Many
businesses don’t think to look to
socialmediamonitoringtohelp.Itcan
be an invaluable resource. Demand
stems directly from consumers.
Social Media and Pharma
For example – imagine there is an
outbreak of Dengue. Tapping into
social media channels to monitor
and track for spikes in conversation
Think social media and you think of marketing. For many firms that
is true. But social media has a far greater application in supply chain
– for example, to gauge the demand for a product. And how firms
should gear up to meet that demand. An astute demand planner
can listen to the social media talk about a product and understand
how demand can change in an area. Another use of social media
is to estimate the demand for a product across geographies. In this
article, Editor of SCMPro, Girish VS looks at the impact of Social
Media in Demand Forecasting.
GirishVS,
Editor,
Using Social Media
in Demand Forecasting
Lead Story
SCMPro_Pg_11_12.indd 11 30/06/2016 2:51:00 PM

Lead Story
about colds and people feeling sick,
can help pharmaceutical firms to
anticipate where remedy products
will be needed most – then informing
supply chain planning to ensure
adequate stocks at those locations.
The process is simple and
straightforward – the firm first needs
to set up a set of key words or tags
that will describe the demand for
the product. The trick is to create a
wider set of keywords – not just the
usual fever, high temperature, body
ache etc. But also include “missing
work” “missed an outing” – these too
indicate an outbreak. Once set up,
firms are in a position to pick up early
warningsignalsofimpendingdemand
spikes or shifts. The same data can
help firms identify the geographic
location where the demand is likely
to pick up.
Social Media in Retail
One sector that is ripe for social
media intervention is the Retail
industry. Across the world, social
media is changing the way retailers
and consumers communicate.
Retailers can use social media to
monitor the customer interaction and
forecast demand shifts. Traditional
analytics used by retailers cannot
catch fleeting demand spikes.
Social media data can be used to
identify events that have an impact
on demand. For example, when a
celebrity wears a particular brand
of merchandise, piece of clothing or
accessory, those brands can see an
almost immediate impact on demand,
thanks to Twitter, Instagram and the
like. In the same way, social media
commentary (e.g. product posting on
Pinterest, positive or negative tweets)
can be decomposed to determine
potential impacts to demand. By
capturing this information, retailers
can predict and respond to these
fluctuations in demand much more
quickly by increasing order quantities
for a particular style or canceling a
promotion.
One brilliant example of integration
of social media in retail is the like-
meter – an on-line display of the
number of likes an article as received
from Facebook, and other Social
Media. This gives the manufacturer
an idea of the popularity of a product
and help them meet demand surges.
For example, Tyrers Department
Stores in UK has integrated a digital
clothes rail which will tell shoppers
how popular a garment is, depending
on the likes, shares and comments on
Facebook and Instagram. Above each
item is a bubble with rising or falling
level of blue water which shows the
popularity of the item.
In an example closer home, Lenskart
introduced the Virtual Mirror concept
in eyewear to assist decision making
online. It provides a “virtual mirror” on
the website where users were asked
to upload their photographs and the
glasses could be virtually worn to see
how they would look.
Firms can capture and utilize social
media data to move beyond the
traditional approaches and create
the type of personalization today’s
consumers expect. By utilizing social
data, firms can also empower their
value chain to predict and respond
to their consumers’ needs, providing
them with an enhanced buying
experience. The ultimate outcome, if
done correctly, is satisfied customers,
happier value chain, and improved
financial results for the firm — one
of those rare cases where everyone
wins.
SCMPro_Pg_11_12.indd 12 30/06/2016 2:51:00 PM

The rd Edition of Warehouse Compendium will be relesed in December . A collection of thought leadership
articles by some of the best in the Warehousing sector in India, the Warehouse Compendium by SCMPro is a
resourceful informative handbook with well researched articles on various aspects of warehousing and inventory
management. Experts from the Industry will be contributing to the compendium.
With high referral value and long shelf life the Warehouse Compendium is a must have reference handbook for the
stake holders of the logistic & supply chain industry.
The Compendium will be reaching , decision makers and potential warehouse users and investors. We would
like to have your esteemed participation in this compendium in the form of an advertisement.
Some of the chapters in editions are as follows
. The changing Warehousing
Scenario in India
. Pick to E ciency
. Warehouse egulations
. Human esource in Warehouse
. VAS in Warehousing
. Trends in Warehousing Automations
. Managing Operational isk in
Warehouses
. Sustainable Warehouse
. Augmented eality in Warehouse
.Site Choice
.Managing isk in Warehouses
All the above Chapters and others are written by experts from the Industry.
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Lead Story
A complex world, with follow-the-
sun supply chains, hyper-connected
partners, and expectation of
exceptionally responsive service has
pushed organizations to redefine
how they run and measure their
Supply Chains. With top line growth
plateauing, there is more scope for
organizations to increase profitability
by optimizing their Supply Chains.
Analytics is fast emerging as a key
enabler to do so. The use of business
analytics in Supply Chain processes
has become more prevalent over
the years. Organizations want to get
insights into their Supply Chains and
make data-driven decisions, instead
of working on best-guess operations.
Digital Supply chains help enable
clients to enhance their operational
performance and add revenue
streams. This includes enhancing
performance of supply chain in
areas such as warehouses, logistics,
inventory management, shop floor
management, and new product
development.
Digital Supply Chain
Digital Supply Chain services
help an organization on the path
to create a truly Digital Supply
Chain. Digital supply chain senses
information and provides a real time
view of the extended enterprise,
provides collaborative platforms and
integrated best practices, improves
operational excellence, productivity,
and customer experience, and
provides real time visibility into the
supply chain.
Digital supply chains help firms move
from products to Services using
advanced inventory optimization
and spare parts planning capabilities
to support this change and drive
better CSAT through a combination
of business process change and
technology solutions. Helps Grow in
emerging markets and tackle demand
stagnation in mature markets by
Enabling Supply Chain network
design capabilities to optimally
rebalancetheSupplyChainsanddrive
cost efficiencies and Supply Chain
agility. And harmonize process and
technology in the era of joint ventures
and M&A by bringing consulting
experience and proven assets to drive
process harmonization and best in
class technology enablement and
ensure that firms are able to deliver
the business case.
Traversing the Digital Journey: A
Guide for Supply Chain Owners
In recent decades, supply chains
have relentlessly approached Digital
maturity. But transformation to
Digital is not just another level of
improvement – it’s a quantum jump.
It’s imperative that organizations
understand the full implications
and journey required. This article
provides insight to customer-front
technologies and trends shaping
supply chains, explicates the digital
journeybydefiningadigitalscorecard,
and outlines the progressive stages of
digital maturity.
A set of new technologies is shaping
today’s supply chain. Beginning with
the Internet-of-Things (IoT), real time
sensor data on geographical position
and electromechanical data of
entities can radically improve tactical
decision-making. Wearables further
empower supply chain operators.
As consumers share buying
experiences on social media, supply
chain managers can access Big
Data analytics to gain meaningful
An organization’s supply chain is integrally linked to its successful growth. With mounting pressure to
deliver multiple, often conflicting objectives of cost optimization, flexibility, and excellent customer
service, enterprises often struggle to manage all the inherent trade-offs and complexities. An integrated
supply chain operations strategy is imperative for enterprises to manage these trade-offs. Damodar
Sahu writes on digital supply chains.
DamodarSahu
Partner–IoT,SmartManufacturing&
Services|Manufacturing&Technology
BU,WiproLimited
Ushering in the next wave of Innovation
in Supply Chain - Industry 4.0
SCMPro_Pg_14_16.indd 14 30/06/2016 2:21:34 PM

Lead Story
SCMPro_Pg_14_16.indd 15 30/06/2016 2:21:35 PM

Lead Story
consumer insights. 3D printing will
change dynamics of production and
supply. NASA’s “Made in Space”
wrench is an example. Mobility
complemented with cloud computing
makes more nodes accessible,
increasing data visibility across all
echelons. Robots can fully automate
warehouses while drones are being
tested for deliveries. There’s no doubt
that the each technology has its own
advantages but for most supply chain
operators, the question remains as
to which to implement. Consumers
are increasingly demanding more
value and highly individualized
products. Expected turnaround times
are shrinking. As customer demands
become less predictable, supply
chains must be more responsive,
agile and resilient.
The method of approach to converting
a digitalization vision into operational
strategy is crucial. The first step is
determining the correct parameters
for assessing supply chain
digitalization. Typically, supply chain
managers gauge success on getting
the right product at the right place,
right time, and right cost. These are
often complemented by drill down
indicators – fill rates, adaptability,
productivity and efficiency. While
these conventional parameters do
gauge supply chain performance,
they can’t evaluate the level of
digitalization. “Digital parameters”
are required, to not only measure
the internal aspects of supply chain,
but assess it from the perspective of
stakeholders:
● Visibility: The ability to fetch
a single truth of data from all
relevant nodes
● Collaboration: A determining
factor which indicates the
propensity and potential to partner
with multiple stakeholders in a
complementary way, achieving a
common objective.
● Agility: The ability to make a
strategic and tactical shift based
on market needs.
● Experience: The quality of
experience delivered to all
stakeholders – from vendors to
customers.
● Simplicity: From defining strategy
to operating physical and IT
processes – all must be executed
with simplicity.
Once a supply chain assesses its
digital readiness, it can then safely
commence its journey. While Digital
is the pinnacle of the supply chain
maturity matrix, its maturity can be
furtherunderstood,basedonthelevel
of integration of digital enablement:
Augmented - The digitalization
journey starts with making
incremental changes to the existing
system. The core system remains
but additional digital components
enhance the performance. At this
stage, the focus is on internal
nodes of the supply chain under
the organization’s control. Digital
parameters, in their most modest
form, are defined and measured
quantitatively.
Adjacent - At this stage, a select set
of digital levers are imbibed into the
supply chain processes, becoming
integral to operations. Digital
initiatives are introduced into the
supply chain organization culture.
The umbrella of digital levers also
starts to incorporate external entities
including key vendors, partners, and
other stakeholders.
Integral - This is the ultimate stage in
the transformation curve. Digital is
core to the business model, processes
andculture.Bythetimeasupplychain
reaches this stage, digital is imbibed
in the majority of the processes. The
supply chain has delivered significant
benefits to consumers and improved
internal measures. Digital parameters
are tightly monitored and reported as
part of the executive dashboard.
Supply chain managers often ask
what the view from mountain may
look like. Here is a sneak peek via key
supply chain processes:
● Digital planning is more
collaborative with significantly
reducedplanningcycletime.Multi-
source and sub-transactional data
analyzed by various tools makes
planning process agile.
● Digital sourcing has, at its
core, comprehensive demand
aggregation. Multiple commercial
models on shared logistics are
available.
● Digital Manufacturing is largely
on-demand with modularization,
robotics and automation at the
core. Delayed differentiation of
product deliveries supports mass
customization.
● Digital Delivery is more
experiential throughout all the
touch points in the supply chain.
There is an accurate view of true
cost to serve integrated into
planning, thereby decentralizing
the tactical decision making
process.
● Digital Returns/ Service are
completely prognostic due to high
visibility. Collaborative models
with stakeholders increase the
service network reach, creating
higher aftermarket revenues.
The journey of becoming a Digital
supply chain is systematic. Beginning
with defining a digital scorecard,
the three stages of maturity must be
accurately assessed and traversed.
At the pinnacle of transformation,
Digital planning to service processes
completely transform – becoming
truly collaborative, visible, agile,
experiential and definitely simple in
their operation.
SCMPro_Pg_14_16.indd 16 30/06/2016 2:21:35 PM

Lead Story
Even though 3G and now 4G
technologies have come up, its
application in vehicle tracking has
not really been prominent. A lot of
research and implementation is
being seen on data transfer over
the internet. Advancements in
Cloud Based Technologies to store
data and availability of common
platforms from Amazon (Amazon
Web Services), Microsoft (Azure), IBM
(Soft Layer) and others have made
the cost and maintenance of tracking
software very low. Moreover, with
smart-phones pervading all parts of
the society, accessing data has also
become very simple.
Data exchange from server on to the
cloud and then to the end user is
also witnessing some improvements.
There has been a clear shift to REST
(Representational State Transfer)
based web services as it is easier and
simpler than SOAP (Simple Object
Access Protocol) and WSDL (Web
Services Description Language)
based interfaces. The advantage of
REST is that it is stateless making it
suitable for Cloud implementation.
The format of the data exchanged
between the GPS device and the
server is normally in the request/
response payload or in the HTTP
framework.
Information is collected by a Telemat-
ics device which is connected to a ve-
hicle by vehicle interface. They can be
of three types – Autonomous, Wired
or Bus.
● An autonomous system is a battery
operated device, which has no
dedicated wired connection to the
vehicle but is collocated. These
devices are normally used only to
collect vehicle information such
as location and parameters of
motion. OLA and UBER CABS have
built in location services to enable
tracking using a driver centric
device along with a wired system
to monitor fuel, A/C, Door Open/
Close.
● A Wired system is one in which the
device is dedicatedly connected
to the vehicle battery and to
various sensors such as Fuel, A/C,
temperature etc.
● A Bus based device connects to the
OBD-II port or the CAN bus in the
vehicle. The CAN bus can provide
a lot of information about the
vehicle including fuel consumed
The world that we live in today would not have been possible without the various modes in the
transportation sector. All of us are bound to be touched by transportation in our lives. From Fleet
owners to Logistics Providers, from Taxi Services to School Buses, vehicle tracking technology is being
increasingly deployed in all aspects of the business world. According to a report, “India Telematics
Market (2013-2018)” from 6Wresearch, the Indian Telematics market is expected to reach $113.7
million by 2018, growing at a CAGR of 22.8% from 2013-2018. In this article Karan looks at vehicle
tracking from a technology perspective and look at the interplay between information, propagation
and standardization.
KaranHanda
ProductManager,AxesTrackSoftware
Solutions
Technology
in Vehicle
Telematics
SCMPro_Pg_17_18.indd 17 30/06/2016 2:21:21 PM

Lead Story
and gear shift, giving insights in
to the driver behaviour regarding
sharp turns and harsh braking.
Of late the OBD-II based tracking
has gained momentum especially
due to Usage Based Insurance
(UBI) wherein vehicle insurance
is decided based on driving
behaviour. However, the OBD-II
port is essentially a diagnostic port
and hence connecting unapproved
devices to this port continuously
can seriously harm the vehicle.
There are three fundamental
categories of data that is monitored
with the help of vehicle tracking
solutions– vehicle location (latitude
and longitude), parameters of motion
like speed and acceleration, and
vehicle parameters like fuel level,
battery condition, ignition state,
temperature etc. with the help of
various sensors.
Advanced Solutions- Futuristic
Trends
The Way Forward in GPS Based
Vehicle Tracking System can be
achieved by value addition to two
present solutions:
● Hardware Driven Innovation
- Focus on Hardware upgradation
or integration of GPS hardware with
various other sensors.
● Fuel Monitoring Sensors
● Temperature Sensors
● RFID/NFC Integration
● Biometric Integration
● Software Side Innovation
- Providing high end analytics and
user-friendly dashboards for senior
and mid-level management to
generate more value out of the data.
● Assessing fleet utilisation
trends.
● Comparing loading times for
turnaround times.
● Listing low performing routes/
drivers.
Components of Software (Data) Side
Advanced Solutions
The three components of software
based solutions are:
● Different UI for different
viewers Different/Custom-made
dashboards for senior and mid-
level management to get a bird’s
eye view.
● Proactive Analysis - Control
waywardness and Defaults.
● Alignment with Operations -
Custom tailor-made solutions to
optimise routes and delivery times
as well as reduce operating costs
and identify bottlenecks and make
long term strategy decisions.
It can be said that vehicle tracking
telematics technology is maturing.
Vehicle interfaces as well as data
interfaces are getting standardised.
A customer requiring vehicle tracking
telematics in his supply chain should
not only look for a compliant device,
but also a software that is compliant
to standards.
To conclude, we may say that Vehicle
Tracking is going to expand from its
current state and offer services as
vehicles become an integral part
of the growing “Internet of Things
(IoT)” landscape. These services may
includeproactiveroadsideassistance,
vehicle health status, security and
connected navigation. These services
are all considered added benefits for
the consumer, engaging the driver
and ultimately improving customer
satisfaction.
SCMPro_Pg_17_18.indd 18 30/06/2016 2:21:21 PM

Lead Story
In 2014, while researching the
application of technology in
businesses, we noticed companies
were creating a huge asset base,
but asset utilization was poor.
Technology enables firms to utilize
their assets better, driving better
profitability. That is what Parsel set
out to do – improve the capacity
utilization in Intra-City logistics.
Another realization was we could
not use business models developed
for other sectors. For example, we
cannot copy the Uber model in intra-
city logistics. One reason is the ticket
size – intra-city may realize a ticket
size of INR 25 to INR 30, while it
will be INR 200 to INR 300 in Uber.
Second, in Uber, the person you are
contracting with is the owner of the
cab. In our case, delivery boys are
not entrepreneurs. Third, interacting
with human beings – like in Uber is
different from interacting with goods.
We need to make decisions about
goods. Fourth, the productivity range
seen in logistics industry is in the
range of 45 to 50 percent – leading
to huge underutilization of resources.
This is where technology fits best.
At Parsel, we decided to address
the underutilization challenge. Our
strategy is to source deliveries from
the biggest possible pool of service
takers – not restricting ourselves
to food deliver or e-commerce
delivery. We see e-commerce as a
separate delivery channel, not a
separate business. For example, we
do deliveries for Aditya Birla’s More
– a modern trade retail outlet. The
last mile delivery there is similar
to Flipkart’s last mile delivery. One
can derive synergies between these
two models. This model of trying to
attract a larger demand pool and
trying to cross utilize the assets is
what is unique to Parsel. This has led
Technology aided logistics firms is an increasing crowded space – every major metropolis has at least
half a dozen firms trying to create a technology backed play. Some succeed some do not. Parsel offers
an IT enabled delivery infrastructure service to the last mile delivery that increases capacity utilization
and improves efficiency. They do this by moving across the multiple last mile delivery models existing
today – food, modern trade, e-commerce etc. Editor SCMPro Girish V S spoke to Himanshu Meena,
founder and CEO Parsel. We bring you excerpts from the interview.
HimanshuMeena,
Founder,andCEOParsel
Unifying Deliveries by Riding
the Technology Wave
Lead Story
SCMPro_Pg_19_20.indd 19 28/06/2016 5:13:09 PM

Lead Story
to better capacity utilization for our
resources. This has helped us scale
up in a less capital intensive manner.
A second aspect is Uber can expect
to subsidize its customer and gain
market share. But to expect to do
that in a B2B model is suicidal. These
realizations shaped our focus.
Parsel focuses on three business
verticals – one the e-commerce
segment, by far the largest
contributor, second, the retail, and
start up segment. The third is the
corporate segment. If we look at
operational cycle in the e-commerce
segment, the warehousing part starts
early – around five AM., where hub to
hub transfers happen. The last mile
delivery starts at nine in the morning
and first mile pickups at around three
in the afternoon. This is a set patter.
An intelligent business can utilize
its resources, try, and fit in those
cycles. A major part of the time in
logistics operation is in organizing
or travelling. Hence achieving
geographical density is crucial. For
example, the food delivery industry
will see activity between 11.00 AM to
2.00 PM and 7.00PM to 9.00 PM. The
delivery boys are hired to work in a 12
hour shift. There is a slack of seven
hours. The idea is to use this capacity
in other segments. I can now use this
capacity for first mile pick-up, last
mile delivery, and courier delivery –
wherever there is a demand.
Parsel is more than movement of
goods – at this time we see three types
of flows which will happen on this
platform. One is the flow of goods. We
have a plug and play platform where
we can integrate other functions
like warehouse facility or a sorting
facility etc. The second is the flow of
information which is crucial going
forward. In terms of information, we
are collecting the ordering pattern
of customers, locational information
about customers and vendors, etc.
Over a period, this will become a
major source of revenue for Parsel.
The third flow is payments – we are
planning to integrate virtual payment
platforms with our solutions. A new
frontier we are exploring is in retail
distribution. E-Commerce majors
cannot plan capacities based on their
peak demand. They are now moving
to a model where they are renting
out space in retail stores. Once an
order comes in, they depend on a
service provider like us to pick up
the products from the retail store for
delivery. This will be a new business
channel for us.
The one thing that will set us apart is
automationofourprocesses.Logistics
is predominantly a manual process.
We depend on automation to keep us
lean. There are three aspects to our
business – logistics, technology and
distribution patterns. We demarcate
deliveries into two – scheduled or on-
demand. Our plan is to build a base of
scheduled deliveries and on that base
build an infrastructure for on-demand
delivery. Parsel is positioning itself in
that cusp, where it can tap into all
kinds of distribution – e-commerce,
B2B, retail, and modern trade. We are
trying to emulate the way information
packets moves across the internet –
the TCPIP protocol. A similar efficient
system should exist for the physical
world. We do not distinguish between
packets moving across our network –
we currently cater to up to five tons
per shipment. Eventually we will have
a main line running across the city,
shuttling goods from one end to the
other,andfeederlinesthatwillcollect
it and deliver it to the customer’s
doorstep. We call this the relay
system. In the relay system, we will
use a truck as a moving warehouse.
For example, we are piloting this for
a pharma firm. Four tempos arrive at
their warehouse in the morning and
pick up the packages. They then reach
certain pre-fixed staging locations,
where bikers come and pick up the
packages for final delivery. This has
led to an 18 percent growth in the
retail outlets serviced.
The unifying trend is the use
of technology that will help us
seamlessly choreograph our
activities, without any one entity
having to wait for picking up their
share of deliveries. We believe we are
in a unique technology sweet spot
that will give us the leverage to play
across categories.
Our strategy is to
source deliveries from
the biggest possible
pool of service takers
– not restricting
ourselves to food
deliver or e-commerce
delivery
SCMPro_Pg_19_20.indd 20 28/06/2016 5:13:09 PM

Guru Speak
Let’s meet the Project Accumulation
customers
The unique nature of large-scale
industrial projects might lead us to
expect that the customers are all as
different as their projects. Far from
it. Our behavioral segmentation
regime, introduced in Chapter 2,
shows just what type of behaviors
we can expect from our customers
i n these construction sites. Let’s
consider who the buyer on this
demand side of the Campaign supply
chain actually is. The customer could
be the main contractors on site, who
India is poised for a growth surge – with large investments planned
in almost all sectors – including infrastructure. We plan to invest USD
one trillion over the next five years on infrastructure – half our current
GDP. This means ability to execute large projects in tight timelines –
something our construction industry cannot do. We need to learn the
skills to deliver such projects. We bring you excerpts from a chapter of
a book Dynamic Supply Chains – How to design, build, and manage
people centric value networks by Dr. John Gattorna. This is the second
part of the series
Dr.JohnGattorna,
ExecutiveChairman,
GattornaAlignmentPvt.Ltd.
Campaign
Supply Chains
How to deliver-in-full-on-time
to project sites
Guru Speak
SCMPro_Pg_21_23.indd 21 28/06/2016 5:14:05 PM

Guru Speak
are responsible for the build actually
happening. They want to get it done,
on time, and as specified. Or the
customer could be regarded as the
owner of the development. Then
again, the customer could be the
parties who will be the ultimate users
or customers of the facility itself.
Costs can grow astronomically and
the consequences can be of a similar
scale if any mistakes are made.
Typically, the customers are longer”-
term in their thinking. You can’t just
say - let’s change that, we’ll do it
different now. Too late! We want costs
and scheduling to be of the precision
of a space flight.
So the customers in the Campaign
configuration demand the opposite of
unpredictability. We need precision
in the staged delivery over time of
our products; essentially, it is tight
accumulation rather than rapid
response. Hence, I’ve called the
dominant buying behavior for this
supply chain Project Accumulation.
Meeting the demands of this segment
is critical to the Campaign supply
chain’s configuration.
Fortunately,experiencecanhelphere:
key demand-side characteristics have
been identified on several industrial
sites, which are listed below:
● Products, components, sub-
assemblies, and Engineered-to-
Order capital equipment designed
for a specific project have to be
gradually accumulated over time,
in a specified location.
● This complete package of
equipment must be fully visible to
individual suppliers involved in the
project, and the project manager
in-charge of the project itself,
and controlled along the supply
chain with all the usual disciplines
inherent in good inventory
management.
● It may be necessary to phase
the delivery of the equipment
according to a predetermined
schedule, in which case accuracy
in inventory management on the
supply-side becomes even more
paramount.
● Typically, apart from clever support
systems, this type of supply chain
requires a ‘hands-on’ management
style along the full length of the
chain.
● In logic terms, we would code
this segment (and corresponding
supply chain), as ‘AP’ in terms of
our P-A-D-1 code.
There may also be a secondary
behavior associated with the
Campaign supply chain, and that is
‘Ia’, which implies a certain degree
of collaboration between buyer and
supplier during the project. If this
does not exist, then completion of
the project on time and on budget
becomes even more difficult, if not
impossible. If collaboration does
exist there is a good chance that
VMl practices will work as well, with
suppliers proactively delivering goods
to site as needed, but this could also
lead to confusion.
In the case of many projects
where designs are changed during
construction, no matter how good
the front-end engineering design,
equipment often needs to be
redesigned. This involves a ‘reverse
loop’ of information to help re-assess
the corresponding logistics needs to
move re-designed equipment, units,
or modules.
There are two possible buying
behavior logic variants. We are
focusing mainly on the inbound or
buy-side as seen from the customers’
perspective (or demand-side seen
from the suppliers’ perspective),
because that is the critical one
for successful on-time delivery of
projects. Accurate lead times are
essential, and hitting project-specific
schedules on time with the required
materials is mandatory. If not, the
customer’s production post-project
on the demand-side can be negatively
impacted, with serious financial
repercussions. Due to this, suppliers
often have to sign up to liquidated
damages clauses to win contracts
and take on some of the risk. For
example, Bechtel was hit with US$27
million liquidated damages bill when
it ran eight months over on the
construction of a power station for
the Athens Generating Company in
2004-13. It can even happen to the
best construction contractors.
So t he c ust om ers in t he
Campaign con guration
d em and t he opposit e of
unpred ic t ab ilit y
D ue t o t his, suppliers
o en have to sign up to
liq uid at ed d am ages
c lauses t o w in c ont rac t s
and t ak e on som e of t he
risk
SCMPro_Pg_21_23.indd 22 28/06/2016 5:14:05 PM

Guru Speak
At this point, it is worthwhile making
what is perhaps a fine distinction
between the logistics serving new
construction such as large Greenfield
capital projects, and that serving
overhaul or maintenance of an
existing Brownfield installation. Very
often, big plants undergo annual
‘turnaround’ projects, shutting
down part of a plant to upgrade or
re-engineer a re-build, and then
turned back on. An example of the
former is the way Toshiba Logistics
works with Toshiba Corporation and
Westinghouse Electric Company
when constructing new nuclear
power stations. Four such facilities
are currently under construction
in the United States. Ray Ledford
of Toshiba Logistics says that
as a logistics service provider of
the Engineer-Procure-Construct
contractor, Toshiba Logistics likes to
reach back upstream to the various
suppliers and sub-suppliers and
take over the logistics responsibility
at the earliest possible opportunity.
They do this by requesting materials
are ordered ex-works in the case of
domestic suppliers. While in the case
of global suppliers, components,
materials and assemblies are
delivered to the nearest port of export
on an FOB or FAS basis at which point
responsibility is transferred to them.
This is a case of the ‘owner’, Toshiba,
taking over part of the inbound
process on behalf of the contractor.
Woodside Petroleum, an Australian
based oil and gas producer that
operates Australia’s North-West Shelf
project provides an example of the
latter situation. When it undertakes
maintenance of one of its liquefied
natural gas (LNG) trains, Woodside
does not want to see materials
delivered to site early, as this leads
to poor cash management, and
unnecessary storage and handling
risks. On the other hand, if materials
are delivered late and the train comes
back on stream late due to delayed
delivery of maintenance materials,
production is lost, the value of which
far outweighs the actual cost of the
materials involved. For example, a
two-day delay in a 40-day shutdown
program adds up to a 5 per cent loss
- enough to throw the whole program
into negative cash flow.
There are some very good examples
of project delays due to scheduling
problems in the Gorgon Project, one
of the world’s largest natural gas
developments, which is currently
being constructed within the same
region off the coast of Western
Australia, in the North-West shelf.
Costs have blown out by more than
50 per cent to US$70 billion, and
poor planning, including logistics,
are partially to blame. According
to Peter Williams, of the West
Australian newspaper, “Gorgon has
suffered from cost overruns and
delays as contractors struggle to
move materials and equipment from
the Australian Marine Complex in
Henderson to Barrow Island in the
Pilbara, in a timely manner.
Industrial companies such as
Schneider Electric find themselves
caught between two worlds, i.e.,
between the supply of products and
components for day-to-day sales and
Consequently they have
not honed t heir proj ec t
sk ills t o t he d egree
nec essary t o supply t he
m aj or c apit al proj ec t
m ark et
usage via distributors and end users,
and Engineered-to-Order equipment
for capital projects. Consequently,
theyhavenothonedtheirprojectskills
to the degree necessary to supply
the major capital project market.
This is now changing as the Project
Accumulation customer segment
grows faster than the conventional
product business, and consequently
more focus is being placed on
handling this type of business.
Indeed Schneider Electric in Australia
is in the process of designing and
building a Distribution Center that
is dedicated solely to servicing its
project customers. They have started
mapping, for the first time, the end-
to-end processes involved in projects,
and identified the issues that must
be addressed to execute the new
projects facility; this will become the
centerpiece of their Campaign supply
chain. It is likely Schneider Electric
will follow a similar path for their
business in China and elsewhere in
the world as well.
In the process, they are developing
completely new customer logistics
offerings, because none previously
existed for this type of business. In
addition, they are cleaning up the
internal procurement of products
from business units across their
entire business, because until now
this has posed many problems. They
are also introducing new forecasting
processes that will ensure material
is ordered from internal and external
sourceswellaheadofpotentialusage.
A priority for the IT systems currently
being installed is that they have high
visibility of project components at all
times. The proposed new Distribution
Center will have cross-dock and
merge-in-transit capabilities to
ensure deliveries are consolidated
for delivery according to a previously
agreed schedule. This will most likely
be operated by a 3PL under contract.
To be continued...
SCMPro_Pg_21_23.indd 23 28/06/2016 5:14:05 PM

Spotlight
One of the toughest negotiations in corporate life is the vendor – supplier negotiation.
Months of effort bears fruit in the one signed contract. And this is where the story stops for
most corporates. The duty to deliver the contract is the goal. However, new management
thought believes the work starts after signing the contract. Modern supplier relationship
management is a two way street, where the vendor and the buyer collaborate to develop
skills and products in the supplier. In this scenario, the buyer extends every kind of support,
including design and development skills to the vendor. In this issue of the spotlight, we look
at the changing nature of supplier relationship management.
Spotlight
SCMPro_Pg_25_27.indd 24 29/06/2016 11:54:00 AM

Spotlight
Supplier
Relationship
Management -
making suppliers efficient
One commonly accepted definition of
Supplier relationship management is
–SRMisacomprehensiveapproachto
managing an enterprise’s interactions
with the organizations that supply the
goods and services it uses. The goal
of supplier relationship management
(SRM) is to streamline and make more
effective the processes between an
enterprise and its suppliers just as
customer relationship management
(CRM) is intended to streamline and
make more effective the processes
between an enterprise and its
customers.
In the first phase, firms looked at
vendors as source of raw materials
and services, delivered as per the
corporate plan. The role of the
vendor was restricted. Very rarely
did a vendor cross the barrier to be
a part of the strategy team of the
corporate. But things have changed
drastically. The vendor today is a
quality manufacturer, capable of
innovation and R&D. The focus is
shifting from efficient delivery at low
cost to strengthening relationship
with the supplier. Across the world,
corporates share with their suppliers
their strategy and concerns, moving
the relationship to a partnership.
One area where SRM will immediately
bear fruit is in supply chain risk
management. As the relationship
is elevated to a partnership, the
supplier becomes a willing link in
risk mitigation. Studies have found
the top procurement teams that have
successfully aligned with their key
suppliers have improved supplier
capabilities of innovation, quality,
reliability and costs/price reductions,
and agility to reduce risk factors.
Greatervaluecanbeachievedforboth
businesses, something that would
be difficult to achieve if operating
independently.
Why SRM?
The first step in developing a supplier
is the spend analysis and market
analysis. Inherent in the market
analysis is supplier risk assessment.
This leads to a rationalization of
supply base and consolidation of
suppliers. This provides the firm a
point in time reduction of cost. The
next step – moving the relationship to
a partnership is the core of supplier
relationship management – the
supplier now is an inherent part of the
organization and will work with the
firm to deliver consistent reduction
in prices and enhancement in quality.
Done well, this yields savings year
after year.
A report by PWC- “Supplier
Relationship Management How
key suppliers drive your company’s
competitive advantage” reveals that
SRM is focused on joint vale creation,
based on trust, but with a limited
number of suppliers. According to
the report, the main reason why
firms embark in SRM is to leverage
on the capabilities of the supplier
and to reduce costs. A beneficial fall
out of a SRM is the reduction in risk
and improvement in supplier profile.
Developing a Supplier Partnership
SCMPro_Pg_25_27.indd 25 29/06/2016 11:54:00 AM

Spotlight
Developing a Supplier Partnership
The next best practice in supplier
relationship management is
systematic creation of post contract
value from the supplier relationships.
The firm should realize that supplier
relationship is not an end in itself, but
an avenue for both the supplier and
the buyer to enhance each other’s
utility. In as much as the firm needs
the vendor, the vendor too requires
a buyer willing to manage value, not
just focus on cost.
SettingupaSRMprogramisacomplex
task. Firms do recognize the benefits
of SRM, but still face challenges
in developing a fair and equitable
partnership with their suppliers. The
single biggest hurdle in SRM is the
focus on costs. Traditional sourcing
has ingrained cost reduction as the
strategic imperative for firms. But as
firms focus on cost reduction, they
lose sight of the long term benefits of
a true partnership. Value drivers like
innovation and risk reduction require
a long term focus. A report by Rand
Corporationreveals,“Companiessuch
as Honda, John Deere, and Praxair
are increasingly making full
supplier cost disclosure a
condition for consideration
as a potential supplier while
also corroborating d a t a
from multiple sources,
particularly unbiased
external data, and
their own knowledge o f
internal costs.”
The second challenge for S R M
is the lack of specific SRM
skill sets. Firms which have u s e d
sourcing like a sword to c u t
prices are not the best teams
to build partnerships. For a l o n g
time, we at SCMPro have
been talking of aligning
the supply chain to the
organizations goals. In a
similar vein, firms should s e e k
alignment between t h e i r
procurement team a n d
business strategy. F o r
example, Cessna reported a
113 percent increase in production
inventory turns over six years,
with dramatically higher material
availability. Cessna achieved this
improvement by creating a strategic
plan and cross-functional commodity
teamsthatrationalizedthecompany’s
supplier base.
IoT in SRM
Technology is the backbone of a
SRM roll out. Like in all other fronts,
IoT is set to change the paradigms
of SRM. Another fallout of IoT is the
increasing complexity in product
development. As microprocessors
and sensors become mainstream,
product development will become
complex. Firms will now need to
increase collaboration between the
product teams and the suppliers.
Most of the IoT developments are
now front ended by the supplier –
not the firm. A significant part of a
sourcing team’s time is spent chasing
deliveries. IoT has the potential to
ease this. Connected devices can
inform the sourcing team about
potential blockages on a route and,
in conjunction with Google Maps
suggest alternate routes that are not
blocked.
IoT will help the sourcing team
generate huge amounts of data.
Quite a number of tasks undertaken
today – like inventory count will
become redundant. Smart shelves
will be able to estimate the amount
in stock in real time, and extrapolate
it with the velocity of consumption to
auto schedule deliveries. Similarly,
the machines will self-diagnose and
order parts for maintenance. IoT will
automate a number of procurement
processes, and gather huge amounts
of data. The future procurement
teams should be able to analyze this
data and develop synergies with their
critical suppliers.
The ultimate aim for a sourcing
team is to convert itself from an ad-
hoc buying team to a world-class
procurement team. Across the world,
SRM has become a focus area for
firms. We believe that the time is not
far off when Indian firms will explore
SRM in a structured manner.
while
d a t a
o f
S R M
u s e d
c u t
teams
l o n g
a
s e e k
t h e i r
a n d
F o r
Leverage on supplier capabilities
Figure 1. Objectives to initiate SRM
Deliver on cost reduction targets
Improve security of supply
Become a ‘customer of choice’
Manage the supply risk profile
Enhance supplier relationships
Guarantee sustainable sourcing
Increase the responsiveness of the supply chain
Anticipate on volatile commodity prices
Other
0% 10% 15% 20% 25%5%
SCMPro_Pg_25_27.indd 26 29/06/2016 11:54:00 AM

info@iscmindia.net
+912228742227 / 7808 / 6757
D-204, Ridhi Sidhi Complex, Prem Nagar,
Goregaon (W), Mumbai.-400 062.
www.iscmindia.com
Our Differentiators
 ISCM offers a unique weekend
program for Supply Chain and Logistics
Executives
 Taught by some of the best
Academicians and Practitioners
 Opportunity to interact with industry
peers
 Graduates with 2-3 years of
experience can apply
 Scholarships are available to
exceptionally bright candidates
Eligibility Criteria
World Class Mentors
Dr. Rakesh Singh:
Chairman- ISCM
Dr. Vaidy Jayaraman:
Associate Professor,
University of Miami.
Dr. Satish Ailawadi:
Director, Institute
of Management
Technology, Hyderabad.
Dr. Antony Paulraj:
Professor, Operations
and Supply Chain
Management- Alliance
Manchester Business
School
Arif Siddiqui:
Founder and Director-
Coign Consulting.
Deepak Jakate:
Ex Head – Strategy,
Solutions and Projects
(Distribution), Reliance
Logistics
Dr. Rahul Altekar:
Consultant.
Dr. Suhas Rane:
MBA Faculty in Leading
Management Institutes
EPGPSCM Attracts Talented Nominations From:
and more .....
ExecutivePost
GraduateProgram
inLogistics&Supply
ChainManagement
(EPGPLSCM)
EPGPLSCM.indd 1 28/06/2016 5:08:34 PM

Feature
Warehousing and Logistics are two
key levers and enablers within Supply
Chain. To describe each one of them
in a single word, I would use the verb
‘Store’ to describe Warehousing and
‘Move’ to describe Logistics. Supply
chain will cease to perform without
these key verbs (Store and Move)
since products have to move through
multiple nodes of the supply chain to
undergo the transformation from raw
material to final product and then
move through different distribution
channels to multiple channel
partners before it reaches the
customer. Logistics Management is
all about this journey to ensure
that the journey happens on time
and happens efficiently; Storage
(Warehousing) gives the opportunity
for consolidation and gives you much
needed control to have enhanced
service levels.
Space is money. We understand this from our investment in land
and property. Because of the large investments in land, firms need
to maximize use of the space available to them. An obvious place
to look for space usage is the warehouse. Industry is at a juncture
where it must save every rupee. Warehouse forms 2 percent of
product cost. Alvis Lazarus, Founder, and Executive Director at
Hesol Consulting writes on warehouse optimization.
AlvisLazarus
Founder,andExecutiveDirectoratHesol
Consulting
Warehouse Optimization -
A Competitive Edge
in Supply Chain!
Feature
SCMPro_Pg_28_29.indd 28 30/06/2016 2:47:53 PM

Feature
KANO MODEL IS GETTING SKEWED
DAY BY DAY
Customer Expectations keep pushing
us to our limits. KANO model best
explains the impact of this change.
Most of the past Wow moments
experienced by customers – which
were classified as either ‘Excitement’
factors or ‘Performance’ factors in
KANO model have moved to the ‘Basic
Needs’ factor in the KANO Model. I
have been doing a lot of KANO models
through the years. These changes
result in a skew to the KANO model.
In this article, I have focused on
warehousing specifically, and how it
can be an organization’s competitive
edge.
Warehousing has just become part
of top company strategy:
Decades before, Warehousing was
never even part of the company
strategy and it always took a back
seat. The focus was on Manufacturing
and the game is all about running the
factory efficiently. As years passed
by, competitive edge created by
lean manufacturing and other TPS
concepts slowly died down and it has
become an even game. With that,
Warehousing and Logistics started
coming to Limelight.
In a supply chain, Warehousing cost
is about 1-2% of the total sales.
Efficient supply chains operate at <
1% of warehousing cost to total sales.
But there is a huge variation between
different organizations. For example,
current E-Commerce companies
operate at 4-8% of the total sales…
Yes, E-Commerce industry was not
much worried about this leakage
in 2010 but today leadership team
from E-Commerce industry is under
tremendous pressure to monetize
and certainly, they cannot leave
warehousing costs out. I am sure
warehousing and logistics costs are
in the top 3 of the priorities.
The lamest argument I have heard is
‘Anyways I can bury this cost in my
costing and why do I have to invest
on any technology or skills here at
warehousing? Investment here won’t
break even?’ Answer is simple:
(1) Current market is so competitive
and customerscan see all competitive
info right on their hand-phones. If you
are not price competitive, you cease
to exist.
(2) We are talking about leakage of
3-4% on total top-line and that’s a
huge stake.
When it comes to competitive pricing,
healthy bottom line and enhanced
service levels, warehousing and
logistics have to be part of the core
strategy.
WAREHOUSE OPTIMIZATION
There are two main optimization
verticals under warehouse
optimization.
Warehouse Resource Optimization
● Warehouse Space Optimization
● Warehouse Resource Optimization
Warehouse Resource Optimization is
all about the efficiency of the people.
There are about 10+ measurements
on evaluating the efficiency. A
single metric called the ‘LPMH’ –
Lines per man hour consolidates all
these metrics. Warehouses achieve
efficiency through eliminating non
value added activities. There are
multiple methods available – Theory
of Constraints (TOC), Waste Analysis,
Therblig Study, VSM (Value Stream
Mapping), GEMBA Study, Spaghetti
Map etc... A combination of the type
of problem/requirement and used
as stand-alone or as a combination
determines the techniques selected.
Out of the total value that can be
brought-in through warehouse
optimization, Resource optimization
contributes around 15-30% of the
total value addition as bottom-line
savings.
Warehouse Space Optimization
In a business language, it is all
about efficiently using each square
feet you are paying for. When your
business teams are sweating it out
on field building the top line, these
space inefficiencies silently eat
out huge percentage in bottom-line.
Unfortunately, most warehouses
operate at around 60% or less in
cubic space utilization.
On a positive note, once warehouse
optimization is on radar and once
the organization starts to drive that,
there is a lot of potential to make
warehouses a key strength and edge.
The organization can initiate Space
Optimization on a green field project,
brown field project, or an existing
warehouse. Warehouse Optimization
is not a one-time exercise; it is an
activity to be done every Quarter.
One methodology for Warehouse
space optimization is concepting
or slotting. Concepting or Slotting
is a technique using which we can
evaluate storage designs and storage
structures needed and allocate
products in the right storage zones
and bins. To explain it with a simple
example, just walk into your kitchen,
and ask your Mother or Dad, whoever
is cooking, where are all the spices
stored? Where are the pans? Where
are the vegetables? Where is the red
wine? You would see a specific place
for each of them and a specific
storage container for each of them.
It is possible to employ the same
technique at a very large scale in the
warehouse where there are Millions
of products and lakhs of square feet.
As years passed by,
competitive edge
created by lean
manufacturing and
other TPS concepts
slowly died down
Warehouse
Optimization is not a
one-time exercise;
it is an activity to be
done every Quarter
SCMPro_Pg_28_29.indd 29 30/06/2016 2:47:53 PM

Interface
The promoters of Vamaship have
a successful brick and mortar 3PL
service offering. However, there
still is a huge gap in the logistics
service business – organized players
are not able to reach out to the
SMEs. On-boarding these SMEs is a
costly proposition, requiring a large
dedicated sales team going into
these clusters where SMEs operate,
and tap each of them, one at a time.
Apart from effort and cost, it is a huge
drain on corporate time. There are
quite a number of excellent freight
forwarders with exemplary service
and reasonable costs. But are not
able to reach these mass shippers.
This gap has always existed.
This gap can easily be bridged using
technology. Vamaship was conceived
as a multi-modal platform to serve
these mass shippers. The idea is –
any shipper should be able to sign
in from anywhere in the world and
ship any product to another part of
the world at neutral prices. Today we
have multiple touch points through
Vamaship is a technology–driven logistics platform launched in October 2015, which integrates unorganized logistics
processes through air, ocean, and surface transportation, aggregates customer demand for cargo movement from SMEs,
e-commerce websites and even individual shippers with fewer requirements. With the aggregation of volumes and
automated shipping processes from inquiry till payment, the company helps shippers minimize cost, passes customers
bulk shipping rates and cuts short the time taken for logistics brands to collect their dues from customers. Girish V S
Editor, SCMPro interviewed Bhavik Chinai, CEO Vamaship. We bring you excerpts from the interview.
Becoming the World’s
Shipping Partner
which a customer has to access his
data. There is no one platform that
can be used by everyone across the
value chain. The factory can use it
for their movement, FTL or LTL, the
admin can use for courier, and the
core business can use for sea and air
freight. You may still have the same
partner, but there is no automation.
And hence the genesis of creating a
single platform for shipping anything,
anywhere, anyhow.
We should realize that each service
offering follows its own TATs, price
levels, and processes. Of these prices
will continue to be different. The way
to bridge this is to bring all partners
to one neutral platform, which is
the service offering of Vamaship.
The freight rates offered by freight
forwarders between two locations
could vary by as much as 50 percent.
This is purely due to information
asymmetry. The need of the hour is
a neutral platform where shippers
can see who is offering what rates.
This is a great value add for shippers
Interface
BhavikChinai,
CEOVamaship
SCMPro_Pg_30_31.indd 30 28/06/2016 5:13:23 PM

Interface
and partners. This brings in price
transparency.
Moving on to service levels – there are
minor variations, but more or less, the
shipping process is the same across
the world- in terms of the number
of documents required from the
shipper, customs clearance practices
for different HS Codes, in terms of
the shipping documents required for
the last mile. It is always the same.
The only difference is the number of
agencies connected. As the agency
count increases, the documents
will change hands more number of
times. We have identified, across the
spectrum from dangerous goods to
perishables to general cargo, all the
sets of documents required. We are
now trying to connect with different
agencies and ICEGate to figure
out if we can automate the flow of
information into ICEGate to give them
a shipping bill number instantly.
Automation of document flow is
done. The next step is automation of
the other stakeholders.
There are a number of players who
have tried to do this in bits and
pieces. The sticking point is absolute
neutrality in price – there should not
be even one instance where a shipper
can get a better price using the
traditional model, as opposed to the
platform price. Shippers need that
assurance. Promoters get absolute
visibility with shipping. Today, with
the way logistics works and the way
logistics managers control the supply
chain and partners to work with,
visibility is compromised. With our
mobile apps, promoters can track
their shipment without having to
depend on any third party. The biggest
sticking point for us is our single
point of contact – across the different
shipping categories and needs.
From having to deal with multiple
agencies, and multiple follow up,
today they have the luxury of a single
point of contact for all their logistics
and courier needs.
Managing such a service does
require better quality of people. We
have been able to attract people
who are passionate about logistics
and technology. To keep our costs
down, we have automated every
process within Vamaship. One of the
advantages technology offers is track
and trace capability. Barring a few
dark spots like a container moving
from the ship to the dock, we have
managed to offer complete visibility
to our customers. And we are working
towards eliminating some of the
dark spots. We use some of the best
technology to ensure our customers
can transact seamlessly over our
platform.
Which brings us to our value
proposition – we can provide a one
stop solution for all movement needs.
When an SME comes on board, they
have complete visibility of current
prices and delivery times. They can
then take an informed decision about
the shipping mode and agency. They
have this option at the click of a
button. Another big value add is our
assurance of the genuineness of the
agencies transacting on our platform.
Several countries have stringent
conditions on supply chain partners.
Every partner who signs up with us
goes through a rigorous checklist,
including the technology they have.
They come on board only if they pass
the inspection.
Books Published
Pocket Book of Shipping Definition
Clearance Through Customs Clearance
Port Management
Handbook for Custom Clearance - English/ Hindi/ Gujarati
A Pocket Book of Shipping and Logistics
All you Needed to know about EXPORT-IMPORT
SCMPro_Pg_30_31.indd 31 28/06/2016 5:13:23 PM

Academic Advocacy
Supply chains connect the
manufacturer, his supplier, and
consumers in a complex web. An
efficient supply chain can lower costs
andhaveamajorimpactoneconomies
and societies. Because of its impact
on economic growth, both firms and
governments focus their attention on
supply chain costs. According to the
author, “Logistics costs accounted
for 8.2% of gross domestic product
(GDP) in the United States in 2013,
or about $1.39 trillion (Wilson, 2014).
In Europe, they accounted for 7.2%
of GDP across the EU 27 countries
or about €850 billion in 2008 (A.T.
Kearney and the European Logistics
Association, 2009). Asian logistics
costs, excluding China, Japan and
India, accounted for about 17% of
GDP (Wilson, 2014), while in Thailand
they represented a little over 15%
or US $55.4 million of GDP in 2010
(Paijitprapapon, 2013). Thus, costs
may be considered a hygiene factor
as a trend and ongoing issue that
underlies management thought and
decision-making.”
The author discusses the following
rends in this paper:
● Globalization of supply and
markets
● Time compression, product
complexity and shrinking product
life cycles
● Quality of performance and service
A number of pressures affect the supply chain function – globalization of supplies and markets, shorter
time to market, product complexity, faster obsolescence, talent shortage and supply chain disruption.
In a paper published by David B. Grant, Hull University Business School, Hull, United Kingdom,
discusses and synthesizes these important trends and focuses on risk as an issue that, besides costs,
underlies and/ or affects almost every other trend. You can read the entire article at https://helda.
helsinki.fi/bitstream/handle/10138/159808/194_1048_1_SM.pdf?sequence=1
DavidB.Grant,
HullUniversityBusinessSchool,Hull,
UnitedKingdom
Trends in Logistics
and Supply Chain
Management: A Focus on Risk
● Shortage of logistics and SCM
talent
● Impact on the natural environment
● Risk and disruption and supply
chain security
The aim of supply chain risk
management is to ensure products
reach consumers in time, at the least
cost. It tries to anticipate any event
that can delay or disrupt the delivery
of goods and services. Next to cost,
risk should be the focus of any supply
chain.
The domain of logistics research and
SCM face several trends and issues
going forward for the rest of this
decadeandthenext.Further,Thailand
and other Asian countries need to
address some of them in a unified
fashion in the run-up to AEC 2015.
Globalized markets, operational
pressures to produce better and
cheaper products at a faster rate
without compromising quality and
service, a shortage of qualified
and interested talent, and external
pressures regarding the natural
environment all provide a challenging
and risky business environment for
firms in developed and developing
countries. However, recognition of
these trends and issues, and the
inherent risk surrounding them, also
present an opportunity to manage
them and become leaders and indeed
long-term survivors.
SCMPro_Pg_32.indd 32 28/06/2016 5:13:35 PM

Demand
Planning &
Forecasting
MAster Class
22nd
& 23rd
September 2016
Continuous improvement in demand planning and forecasting is a must for companies using supply chain
as a source of competitive advantage. This master class will look at why some firms do better than others
in terms of demand planning and forecasting. What are the basic tenets that are missing? What is required
to make demand planning exercise successful?
info@iscmindia.net
D-204, Ridhi Sidhi Complex, Prem Nagar,
Goregaon (W), Mumbai.-400 062.
+91 22 28742227 / 7808 / 6757
www.iscmindia.com
 How to develop an effective and realistic baseline forecast that drives better planning
 What is the right forecasting model for your supply chain
 How do we deal with different kinds of uncertainty while demand planning and forecasting.
 How to minimize politically motivated biases and reduce bullwhips in supply chain.
 How to align all functions to a single S&OP Forecast
Learning Objectives
 Matching demand with supply: The Basic
framework for demand planning
 Supply chain complexities, uncertainty and
forecasting
 The Forecasting methods: Selection, estimation and
assessment
 Forecasting Methods and Approaches
 Understanding Variability in the supply chain.
 Measuring the Forecast performance:
Understanding Bias and Error
 Technology in Forecasting
 Managing forecast by building an effective
Operations and sales planning processes
 Dealing with real time demand planning challenges:
Simulation exercise
The agenda
Master Class Leaders
D r. R ak esh Singh
Chairman of ISCM
Pvt. Ltd. Mumbai.
D r. N eeraj H at ek ar
Director & Professor
University of Mumbai
D r. R ahul A lt ek ar
Advisor to AurionPro –
an IT solutions provider.
Who Should Attend?
CMO/CSCO/Demand Planning Professionals/
CFO/COO/Head of Sales etc.
Master
Class fee
INR 20000
taxes
DPF Ad.indd 1 30/06/2016 3:00:34 PM

Humanitarian Logistics
Feeding the
Next Gen –
A Labor of Love
What are the challenges you face
in running a humanitarian supply
chain?
1. Demand Estimation: Being a
school meal program, Akshaya
Patra enjoys the benefit of
largely predictable demand as
the number of routes, location
of schools, number beneficiaries
per school and the menu – all
are pre-decided. At the same
time, there are instances where
sudden demands arise; internal
factors like production issues,
manpower issues, nutritional
India is a young nation. India is a hungry nation. India seeks knowledge
and education. Ensuring our children stay in schools, gaining that edge
through education is a tough goal. Akshaya Patra – born out of a vision
that no child should go hungry – is today the largest Mid-Day meal
scheme in the world – feeding 1.5 million school children and growing.
In this issue, we bring you an interview with Vinay N Kumar, Director
Operations, The Akshaya Patra Foundation on their supply chain. We
hope to see more of their kind.
VinayN Kumar,
DirectorOperations,
TheAkshayaPatraFoundation
SCMPro_Pg_34_36.indd 34 29/06/2016 12:05:24 PM

norms compliance etc., and
external factors like new request
by teachers, sudden changes
in prescribed menu of MDM
department etc.,
● In case of disaster relief kitchens
– appropriate demand estimation
is a critical success factor to reach
out to as many beneficiaries as
quickly as possible.
● If demand estimation goes wrong,
then there could be situation
of stock outs while the meal is
needed the most of over stocking
leading to storage and quality
issues.
2. Road conditions could impact On-
time Deliveries: The cooked meal
needs to reach the schools on-
time by lunch time of schools. And
Akshaya Patra operates in areas
where the road conditions range
from good to worse. So, adequate
time needs to be factored in for
deliveries keeping a close watch
on risks that exist.
AkshayPatrasuppliesfoodinlargely
rural India - how is your supply chain
structured?
● Akshaya Patra’s present reach
is majorly to primary schools
in underprivileged areas in and
around urbans like Bangalore,
Ahmedabad, Hyderabad, Jaipur,
Hubli, Bhubaneshwar and
Lucknow. Akshaya Patra also
operates centralized kitchens in
ruralareaslikeBellary,Nathdwara,
Puri etc.,
● The procurement part of supply
chain is kept simple and similar
– Rice & Wheat are a grant from
the Government, hence Akshaya
Patra’s work is limited to picking
up the allotted grains from
the nearest FCI warehouses /
state warehouses. For primary
ingredients like Dals & Pulses,
Edible Oils, Sugar; depending
on the quantity required the
procurement is done from
millers / producers directly. For
rest ingredients like blended
spices, vegetables and dairy, the
procurement is done from nearest
markets to ensure local taste, to
ensure fresh and good quality
ingredients.
● Transportation of cooked meal
is running against time as shelf
life is just 5-6 hours. Hence, to
reduce the cook-to-consumption
time, Akshaya Patra has standard
vehicle designs, stainless steel
racks that hold the vessels in place
in spite of many jerks. Few vehicles
that go on longer routes have
insulated containers so that food
is still fresh after hours.
What factors do you constantly
evaluate to ensure food quality does
not suffer during transit?
● Good Warehousing and
Manufacturing Practices (GMP)
– To ensure safe food ingredients
and safe production. During
transit too, the vehicles and vessel
lids are sealed, food handlers and
teachers are adequately trained to
unload and serve food.
● ISO 22000:2005 – 13 out of 24
Akshaya Patra kitchens are ISO
certified that has an evolved food
safety management system.
● Monitoring cooked food
temperature before transit and
after delivery – Akshaya Patra
adopts a mechanism of frequently
checking the temperature of
cooked food at various stages. In
cauldrons, the Rice records 88-92
degree Celsius, while packing at
least 82 degree Celsius is ensured
so that while consumption it not
less than 60 degree Celsius. Hot
food, apart from ensuring taste
and higher food consumption, also
retains quality and nutrition.
Indiadoesnothavetheinfrastructure
for the farm to fork supply chain –
how have you taken care of this?
1. For dry ingredients, though the
infrastructure is not up to the
standards, the impact can be
alleviated through
● selection of right supply partners;
● employing progressive
procurement strategy (buying
from appropriate locations and at
proper timing w.r.to harvests) and
● maintaining adequate inventory
levels to counter the supply chain
challenges
2. For Fresh ingredients with less
shelf life (Vegetables / Dairy)
● Tie up vegetables supply partners
in locations/districts where
Vegetables are grown and with
good road conditions
● Tie up with Dairy plants directly
and placing orders ahead of time,
to ensure planned production
(flavored milk / curd etc.,)
You are a part of the humanitarian
supply chain - What benchmarks
have you evolved?
There are not many organizations
that supply fresh food in the scale and
network that we do. Hence, many of
our operations are unique; however,
we do benchmark a few areas like
procurement with large buyers of
similar agro products, production
with some of the large south Indian
temples, mass caterers like Sodexo,
Compass etc.; distribution is an area
where we are unable to benchmark
with comparable players; yet we
compare our supply chain with
the urban goods supply logistics
companies, diaries etc.
How do you use technology in your
supply chain? How does it change
your supply chain strategy?
All the inward supply chain is
recorded on the ERP system and
hence is available digitally for all
reports, analysis, comparisons and
decision support. The outbound
supply chain is tracked through GPS
for most of our vehicles, coupled
with fleet cards for fuel tracking. We
are on the verge of digitizing all the
outbound supply chain data by way of
smart phones/ hand held devices that
would be given to field force.
SCMPro_Pg_34_36.indd 35 29/06/2016 12:05:25 PM

What key supply chain metrics do
you track?
● Spot Market Price Vs Purchase
Price for commodities.
● % of CSS Team cost w.r.to the total
purchase value.
● % share of orders of premier supply
partners, supplier ratings thereof.
● On Time Delivery
● Route distances, average mileage
Improving food freshness at the
school is a complex challenge
– especially with major climate
changes in a region. What
innovations have you brought in to
ensure this?
We have recently adopted the use of
Insulated Vessels in which we send
food to schools that are far flung and
also to more schools in winters.
How would you define the
relationship with your suppliers?
What guides this relationship?
● Akshaya Patra views all its
suppliers as ‘supply partners’, not
just vendors. The stock plans are
shared periodically and adequate
time and scope is given to all
partners to add value to the supply
chain.
● Preferred Supply Partners – who
are innovative in their business
model, who provide steady price
advantage and services, who
upgradetheirscaleandtechnology
to suit the increasing demands of
Akshaya Patra.
“Zero Waste” is a concept that is
gaining currency in supply chain
management – what are your efforts
on zero waste?
Many of our kitchens work on ‘zero
waste’; we have recently adopted
biogas plants in many of our kitchens
which helps consume all the food
waste and produces gas that is used
in cooking; the water from our plant
is treated using ETP/STP and reused
in the kitchens for non-cooking
purposes; in kitchens where we don’t
have biogas, we give out the solid
food waste towards animal feeding.
We do not contribute to the waste of
the municipalities.
What is your expansion plans for
over the next couple of years? How
do you plan for the supply chain in
these areas?
We have plans to add 10 kitchens
in the next 2 years; the growth is
likely to happen in states that we are
already present; the supply chain in
the new areas will also be serviced
from the central team which has been
servicing the existing kitchens.
What are the steps towards
sustainability you have taken in
your supply chains?
We are moving every year closer
to the model of buying the raw
materials from growers/ processors.
We are penetrating the supply chain
and moving closer to the growing
markets. We are striking long term
deals with our suppliers; we are
entering into long term partnerships
with some of our trusted vendors to
ensure sustainable, quality supplies.
We are also planning to have a few
large regional warehouses of our own
to support the supply chain team in
procuring large quantities when the
markets are favorable.
Your program needs uninterrupted
service. How resilient is your
supply chain? What parameters
do you track to ensure there is no
disruption – both raw materials and
cooked food?
● For Raw Materials – all the risks are
assessed through a thorough risk
management exercise. Akshaya
Patra secures 14 days of inventory
to counter any food shortage
that may occur due to disasters.
For additional requirements to
counter steep price rise and
shortages, Akshaya Patra has
corpus to block / buy / contract for
higher quantities of ingredients
from reputed national brands at
designed specifications.
● Akshaya Patra’s supply partners
are from across 19 major markets
that cater to major part of nation.
Hence, though few markets are
impacted by shortage, the supplies
can still be bought from stand by
markets / stand by suppliers.
Looking ahead – what are the major
forces that will shape your supply
chain?
The major factors that will affect
our supply chain are the quality of
the goods from the Government
Warehouses, strengthening of
rupee where the commodities
are dependent on imports, strict
government policies to curb hoarding,
concessions on storage facilities of
fresh food, improved agricultural
produce in the country. We will also
have to watch the fuel prices as
the same affects our inbound and
outbound supply chain.
Therewouldbeanumberofinspiring
moments – can you share a few?
In 2012 Akshaya Patra celebrated
serving of 1st billionth meal, and
in 2016 we are celebrating the 2
billion meal mark and 15 glorious
years of Akshaya Patra. Recently our
Chairman Shri Madhu Pandit Dasa
was conferred upon Padma Shri in
recognition of the distinguished
service rendered by Akshaya Patra
for the children of India. In another
occasion, The Akshaya Patra
Foundation (TAPF) was bestowed
upon the Nikkei Asia Prizes, in
recognition of its contribution in
the field of Economic and Business
Innovation. It is the one of the most
prestigious awards in Asia.
The Akshaya Patra Foundation
has been awarded with the Gold
Shield by the Institute of Chartered
Accountants of India (ICAI) for
Excellence in Financial Reporting
for five years in a row from 2008-9 to
2012-13, making it the only NGO to
be inducted into the Hall of Fame.
SCMPro_Pg_34_36.indd 36 29/06/2016 12:05:25 PM

SCMPro_Pg_37.indd 1 29/06/2016 12:47:05 PM

Feature
Aisle-Master Articulated
Electric Forklift Truck
for Cold Stores
Problem Statement: Hatsun has to maintain their products in a
cold store at -40 C. One of the main operating cost is electricity
to run the refrigeration units to cool the cold store. The Hatsun
team wanted to minimize the refrigerating cost per pallet, while
maintaining the ability to select any 2 pallets in different aisles at
the same time. The peak throughput required was 45 pallets per
hour. In order to increase labor productivity & equipment uptime,
Hatsun wanted to maximize the time the driver could spend in this
-40 C cold environment between breaks.
Solution & Advantages: The Nilkamal MMSS (Material Movement
& Storage Solution) team carefully studied the application, and
teamed up with the Combilift team to offer an Aisle Master
(AM20WHE) electric articulated forklift truck with a heated cabin
in a narrow aisle pallet storage system.
● Lift height 9050mm, capacity 2000 Kg, and de-rated capacity
at height 1235 Kg.
● Aisle-space 2200mm (P/P). Pallet dimension 1200 x 1200mm.
With the use of a Normal Reach Truck the Aisle Space required
would have been 3200mm. Using our truck allowed the customer
to store & cool 22% more pallets with the same operating cost.
● The Heated Cabin allows the driver to comfortably operate the
truck in the -40 C environment for 4 continuous hours without
breaks. This would have been 30min without the heated cabins.
This has increased labor productivity & equipment uptime.
Customer: Hatsun Agro Products Ltd, Tamil Nadu,
Industry: Private Dairy
Products: Milk, Ghee, Butter, Curd, Paneer, Buttermilk,
Dairy Whitener, Skimmed Milk Powder, Ice Cream.
This Case study is provided by Nilkamal on
Aisle-Master for Cold Storage
Advertorial
SCMPro_Pg_38_39.indd 38 30/06/2016 2:47:46 PM

Feature
For more Information: mhe@nilkamal.com | Toll Free-1800 1219 115
*All application images are for representation purpose only
● Heated Bar Code scanning window. The glass of the cabin
at -40 deg C gets covered with ice which obstructs the laser
from reading the bar-code. The heated window provided
in the Aisle Master truck prevents ice-buildup, and allows
the laser to read the designated barcode without the driver
having to step out in the cold.
● Battery capacity: (i) The discharge rate of a battery is steep
at cold temperatures. The Nilkamal team carefully studied
this application, and teamed up with Combilift to offer a 930
Ah high-capacity battery. The higher thermal mass of this
larger battery through the 4 hours of continuous operation
prevents quick discharge. (ii) To further extend battery life,
we offered low-power consuming LED lights for visibility &
safety. Both these options increase the time between battery
changes & re-charges, extend the life of the battery, &
improve equipment & worker productivity.
● The battery is quickly & easily changed at the rear of the Aisle
Master with a hand-pallet truck. This increases equipment
uptime & productivity.
AdvertorialAdvertorial
SCMPro_Pg_38_39.indd 39 30/06/2016 2:47:46 PM

Supply Chain Management Professional - June 2016 Issue

Supply Chain Management Professional - June 2016 Issue

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Supply Chain Management Professional - June 2016 Issue